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Brett Chulu


Re-evaluating Treasury’s Transitional Stabilisation Programme self-assessment



ON August 21, Zimbabwe’s Treasury produced a comprehensive self-assessment of the performance of the Transitional Stabilisation Programme(TSP). The TSP is the first of the three envisaged national development strategies meant to attain the government’s Vision 2030 of an empowered upper-middle income economy. 

By Brett Chulu

The TSP was to run for two-and-a-quarter years from October 2018 to December 2020. The sequel to the TSP is the National Development Strategy (One), planned to span five years from January 2021 to December 2025. 

This piece is a critical review of the self-review issued by Treasury on the TSP. The government deserves special commendation for carrying out a comprehensive assessment of the strategy it set out to implement and going a step further to publish this self-assessment.

It is an important step towards establishing a culture of transparency, a central pillar of democratic governance.

My experience in conducting strategic reviews for organisations shows that meaningful reporting is best done when the assessment is grouped around the strategy framework the organisation chooses to build its strategy around, namely: vision, mission, values and strategic objectives. The path of least resistance organisations adopt in conducting and documenting reviews of the performance of their strategy is reporting on activities.

In evaluating Treasury’s TSP self-assessment, we will seek to answer the following questions:

(1) To what extent did the TSP contribute towards attaining Vision 2030?

(2) To what extent were the overarching pre-stated objectives of the TSP met?

(3) To what extent were the values contracted to guide behaviours that support the implementation  of the TSP applied?

These three questions form the framework of our critique of Treasury’s TSP self-evaluation.

Has the TSP contributed to Vision 2030?

As per the World Bank, for the year 2021, an upper-middle income economy is one that has achieved a per capita Gross Domestic Product of US$4 046-US$12 535. The original TSP document does not specify the per capita GDP band aimed at.

This is problematic in that the upper-middle income limits are frequently reviewed by the World Bank. The TSP set out the respective per capita GDP targets for 2018, 2019 and 2020 as follows: US$1 720, US$1 883 and US$2 081. It is stunning that the TSP review by Treasury is completely silent on the out-turns of per capita GDP targets. It is a fundamental omission, the equivalent of reporting on a soccer match, giving detailed descriptions of the facets of the match but fail to report on the scoreline.

The World Bank reports Zimbabwe’s per capita GDP for 2018 as US$1 684 and that for 2019 as US$1 464.The TSP missed the targets for 2018 and 2019 that would the required rate to achieve the Vision 2030 target. In fact, Zimbabwe experienced a declining per capita GDP. With a projected GDP decline of 10,4% for 2020, Zimbabwe will experience a decline in per capita GDP over the TSP period. Facts before us land us at the conclusion that Zimbabwe is way off the Vision 2030 target. The TSP failed to capture this unvarnished truth. It is a big minus on Treasury’s TSP self-assessment.  

TSP objectives met?

The original TSP document listed four “objectives”. Although the TSP stated the four points as objectives, they failed to meet the professional structure of an accepted objective by general monitoring and evaluation standards as well as widely accepted strategic planning standards. One basic and glaring error in structuring the “objectives” was stating the attainment of projects as objectives—this is confusing a strategic objective with a strategic activity.

In the TSP progress review, seven “objectives” are listed. The original TSP outlines its “objectives” verbatim as follows:

-Stabilising the macro-economy and the financial sector.

-Introducing necessary policy and institutional reforms to transform to a private sector-led economy.

-Addressing infrastructure gaps.

-Launching quick wins to stimulate

The progress assessment report states seven TSP “objectives” verbatim as follows:

-Macro-fiscal stability.

-Laying a foundation for private sector-led growth that is sustainable and shared/equitable.

-Further democratisation of the country.

-Normalising international relations.

-Infrastructure development

-Public/Social Services delivery

-Social protection. 

The nation was not informed that the TSP objectives had been reviewed and modified. We are not told in the TSP progress review why the macro-economy and financial sector stability “objective” was watered down to macro-fiscal stability. The private sector-led growth “objective” was embellished to add the quality of expected growth as being shared.

The infrastructure gaps “objective” was changed to infrastructure development. The quick wins “objective” was totally expunged from progress review. Three new “objectives” were introduced in the progress review; normalising international relations, public/social services delivery and social protection.  

It is only fair that we assess the TSP performance from the base of the original objectives. Has the TSP brought macro-economy stability and the financial sector?

Primary fiscal deficits are reported to have been replaced by primary fiscal surpluses. The extent of those surpluses—if they do exist is not beyond dispute—several quasi-fiscal expenditures such as the gold incentive (now terminated) were not recorded as fiscal expenditures. Essential social services have not been given adequate funding despite 

Treasury is claiming primary fiscal surpluses. What is overlooked in the fiscal stability discourse in Zimbabwe is that the country is still experiencing fiscal deficits because the government is hardly servicing interest obligations on foreign sovereign loans. Inflation is slowing down mainly as a result of government allowing partial but official dollarisation, having done a volte face on the unilateral banning of the use of foreign currencies on June 24 of 2019. 

Inflation is projected to close the TSP period in December at above 400% (year-on-year). Forex rates volatility has slowed down significantly following the introduction of the Dutch forex auction system, banning of dually-listed international  stocks on the Zimbabwe Stock Exchange. We still need the benefit of time to assess if the slowing down of inflation and forex rates stability is sustainable. 

Current account surpluses have been cited as an achievement in the macro-economy stability area. The current account is an exact but opposite mirror of the capital account. We need to tease out how the current account surpluses are being funded.

The capital account fundamentally consists of cross-border investments in financial instruments and changes in central bank reserves. Who has been sacrificed to attain the current account surpluses? Are we allowing investors to repatriate their dividends? Is the fall in imports a result of deliberate strategic intent or a result of the global slowdown spawned by Covid-19? To what extent has foreign aid and bilateral aid (such as maize donations from South Africa) shored up our current account? What about our failure to pay interest on sovereign loans? The current account surplus seems to be a result of factors largely beyond the control of Treasury.

 Has the economy been transformed to deliver private sector led growth? The drivers of private sector-led economic growth was premised on opening up the economy to international investment and the unlocking of external financial flows through striking a debt treatment deal with international financial institutions and bilateral lenders (Paris Club and London Club). The Staff-Monitored Programme (SMP), an informal agreement with the International Monetary Fund (IMF) to help Zimbabwe attain the targets in the TSP, did not turn out as expected; Zimbabwe failed to meet the targets it set for itself.

Country risk has thus remained elevated. Companies that are getting external finance are getting it priced in with the country risk. The 99-year commercial farm land leases are yet to be made bankable. Policy inconsistencies have not been eliminated as has been envisaged by the TSP. Some international firms have had their brands soiled through allegations of manipulating exchange rates. They were judged before investigations were done; they were absolved of any wrongdoing after investigations were conducted. All these key issues have militated against private sector-led growth. 

The TSP review cites improvement in the Ease of Doing Business ranking. It needs to be stated that the compilers of the Ease of Doing Business index state clearly that the Ease of Doing Business does not form a basis for making investment decisions. The Ease of Doing Business index has strategic value when it is used in league with the corruption index. The two indices are highly correlated. 

Our corruption index has barely improved during the TSP period. An improvement in the Ease of Doing Business ranking does not relay meaningful information if there is a little improvement in the specific Ease of Doing Business sub-indices. 

Have the infrastructure gaps been closed?

The original TSP document did not explicitly state the infrastructure gaps. It is difficult to assess if the gaps have been closed. We will go by inference. The government indicated a grand plan to bring 200 000 hectares of land under irrigation every year until 2030.

The TSP review document did not report the performance against this target. In terms of power generation, the TSP review cites upgrades at the Hwange Power Station and Kariba. The big one, Batoka power project, was not mentioned in the TSP review document despite government hailing the US company General Electric as poised to fund the project. Road projects were also cited as an achievement of the TSP. 

The matter of the second oil pipeline from Beira to Mutare was not cited in the TSP despite its strategic importance.  

Has growth been stimulated by quick wins? 

The TSP review document did not explicitly address progress on this objective. What is clear is that the TSP missed the 2018 and 2019 economic growth targets, with 2019 experiencing a negative growth of 8,3%. The year 2020 is projected to record negative growth of 10,4%. The TSP review attributes the negative growth to external causes, specifically droughts, Cyclone Idai and Covid-19. It gives an impression that there are no internal policy dislocations contributing to that negative growth.

Incidental achievements

The TSP review document surreptitiously introduced three additional objectives. 

The achievements claimed in terms of social protection and public service delivery are incidental, not a product of strategic forethought. The objective of normalising international relations has suffered significant setbacks. Basic freedoms have been flagrantly violated. Undiplomatic responses to concerns raised by local and external groupings have took out the credibility from the re-engagement thrust. Farm seizures continue. The debt treatment process has stalled due to failure to meet economic reforms.

The US$3,5 billion Global Compensation Agreement, as it stands, is just an acknowledgement of debt that was off the books since government does not have a solid plan to fund the compensation. This new debt will simply complicate the process of negotiating external debt treatment. 

As has been established in formal performance management, self-assessors tend to over-rate themselves. The TSP review paints a picture of a good performance. This critique has pointed out the areas unattended by the TSP review. The writing of the forthcoming National Development Strategy (One) needs to align itself as closely as possible to benchmark strategic plans with clear objectives, strategic indicators and targets to enable evaluation based on strategic commitments, not incidentals. Future reviews should clearly provide verifiable evidence that strategic objectives have been met or not met.

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